Wednesday February 6, 2008 - 21:27:43 GMT
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FX Blog: Market Snapshot Far East Open
GVI Market Snapshot-- Far East Open
- The USD has continued to advance against the EUR and GBP, but eased over the NY session. The carry trade funding currencies (JPY and CHF) are roughly better from late in NYC Tuesday.
- The market seems to have already priced in the worst for the U.S. and for now is ignoring its significant negative carry vs. the EUR because many fear the ECB is in the process of repeating the recent policy errors of the Fed.
- Most are expecting a -25 bp (to 5.25%) rate cut from the BOE on Thursday. Such a move would be seen as positive for that economy. The ECB is seen likely to keep policy on hold. The tenor of the comments by ECB President Trichet will be closely scrutinized. Many feel that Trichet is out of touch with the current global economic environment.
- The commodity currencies (AUD, CAD and NZD) are trading mixed. Gold and oil are mixed as well.
- Far East equity markets closed down sharply Wednesday. Some traded half-day sessions ahead of the lunar new year observances starting Thursday. The Shanghai Exchange has been closed all week. European bourses closed mixed to better. U.S. bourses closed weaker. Bond prices were weaker.
- The economic calendar from the U.S. this week remains light.
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